TURKEY: Turnkey contract for BOT power plant

02 June 1995

A letter of intent for a turnkey contract valued at about $110 million has been awarded to the Netherlands' Thomassen Power Systems by the build- operate-transfer (BOT) venture planning to build a $190 million, 180-MW, gas-fired plant at Esenyurt (MEED 26:5:95).

The venture comprises the US' Mission Energy and the local Doga Enerji. Consultant to the venture is Germany's Lahmeyer International. The plant will use combined-cycle turbines made by the US' General Electric Company (GE), assembled in the Netherlands and shipped to Turkey for installation.

The plant, which is the first BOT venture to go ahead in Turkey, is scheduled for completion and start-up in mid-1997. This method for building major utilities was pioneered in Turkey in the mid-1980s. In the past, the government's refusal to provide sovereign repayment guarantees, for what in effect are private sector projects, has proved to be a hurdle in the arrangement of commercial funding. The BOT's financial consultant is Citibank.

A by-product of the venture is the provision of heating for two large housing projects at nearby Esendent and Bogazkoy, which will both give the project a high social profile, and bring in additional revenues, says the joint venture. In addition, its medium size makes the project easier to implement than other much larger investments.

The venture will operate the plant for 20 years, and repay construction costs from its profits and sales of electricity to the Turkish Electricity Generation & Transmission Corporation (TEAS). It claims it will provide both electricity at a discount to TEAS' own prices and heating at a discount to market tariffs.

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